The strategists of Bank of America (BofA) have pointed out that the global stock market has issued a overpurchase warning with moving averages already at historical levels that mark a sell signal for risk assets according to Levin Stamm a Yahoo Finance.
Around the 89% of the MSCI stock indices traded above their moving averages 50 and 200 days during the week ending January 28, according to a report from the team led by Michael Hartnett. This exceeded the 88% threshold, which they consider a sell signal.
This extended position coincides with the withdrawal of $15.4 billion from equity fund investors during the week, according to Bank of America strategists, underscoring greater caution as stock markets rise. The MSCI World Index hit an all-time high on January 27 and is heading for its strongest month since September.
«He BofA bulls and bears indicator still shows extreme optimism among investors, as strong breadth in global equity indices and a robust credit market have so far offset capital outflows,” Hartnett wrote.
Meanwhile, flows to US equity funds have resumed, with an uptake of 9.2 billion dollars during the week. Europa registered his first departures in seven weeks, with 400 million dollarsaccording to the BofA team, citing data from EPFR Global.
Hartnett stated that his favorite investments for 2026 are long positions in bonds, international stocks and gold. Its preference for international equities from the end of 2024 proved correct, as the United States underperformed.